Why Do People Hate the Property Tax?

It’s the envelope in the December mail that doesn’t wish you happy holidays. Instead, it says: “Here’s how much you owe in property taxes. How do you want to pay it?”

Which probably triggers many thoughts in the average taxpayer’s mind. To help, here are 10 questions — and answers — about Wisconsin’s property tax system.

This bill tells me what my share is, but how much is Wisconsin’s total property tax levy?

More than $10.6 billion this year, which is a one-year increase of 1.3 percent. But tax credits will offset that by about $1 billion, according to the Legislative Fiscal Bureau, the non-partisan budget office. You pay a “net” – or after credits – amount, if you live in your home. If the credits were abolished, your tax bill would much higher.

How does that $10.6 billion compare to other state and local taxes?

The $10.6-billion property tax levy is the single largest state or local tax. By comparison, Wisconsin residents paid $7.49 billion in personal income taxes last year and $4.4 billion in sales taxes.

Are Wisconsin property taxes among the highest in the nation?

Yes, although there are different estimates of how we rank nationally. In a January report, the Fiscal Bureau said Wisconsin property taxes amounted to $46.15 of every $1,000 of personal income in 2010, which was ninth highest in the nation, and property taxes totaled $1,694 per capita in the same year, or 13th highest nationally.

Who pays that $10.6 billion in property taxes?

Homeowners pay about 70 percent of it, up significantly from the 50 percent that homeowners paid in 1970. Businesses pay about 22 percent; manufacturers, 3.6 percent and owners of agricultural land, 2.5 percent.

Why do homeowners pay 70 percent of all property taxes?

Homes values increased the most in past decades, although they tumbled in the recent recession. And, starting in the 1970s, manufacturers and farmers got past governors and legislators to give them big property tax breaks.

Republican Gov. Scott Walker repeatedly says spending controls he and Republican legislators imposed on local governments have “controlled” property taxes. Is that true?

Look at your tax bill. Compare it to what you paid last year, and the year before. You be the judge.

Here’s what the Fiscal Bureau says: The mythical median-valued home in Wisconsin was assessed at $148,000 this year, and its owner just opened a tax bill for $2,925 – $18 less than last year and $28 less than two years ago. However, the owner of that average home saw the assessed value of their home drop by 6.1 percent over those same two years – falling from $157,692 in 2011 to $148,000 in 2013. So, it’s good news that the average tax bill went down $28 over two years, but bad news that the home’s assessed value dropped by $9,692.

Todd Berry, president of the Wisconsin Taxpayers Alliance, calls statewide averages like this meaningless, because local government spending decisions can still trigger a 5 percent or 6 percent one-year increase in your tax bill.

Will my property tax bill go up next year?

The Fiscal Bureau projects a $29 increase — or 1 percent — increase on that median-valued home next year, but that’s a best guess at this point.

Why does this property tax bill make me angry?

Some theories: Because, unlike the 5 percent sales paid on a purchase-by-purchase basis, it comes in one bill? Because it comes at the same time your family budget is stretched by buying holiday gifts? Because you just talked to that family member in Minnesota who has a nicer house, and they just told you their property tax bill is only $1,560? Because – remember – Wisconsin property taxes are among the highest in the nation?

Just curious: That $10.6 billion in property taxes is what percentage of all property values statewide?

In August, the state Department of Revenue estimated the value of all property at $467.5 billion. So, the property tax levy this year will equal 2.2% of statewide property values.

7 thoughts on “Why Do People Hate the Property Tax?”

The reason I don’t like the property tax is because it is a tax on the “inaction” of owning property. The concept of have to keep paying the government to continue to use something that you already bought seems wrong. Instead tax actions such as buying or earning income so that you are ever at the mercy of what some future legislature may impose on your ability to live on your land. Obviously this is an opinion.

Walters: “In August, the state Department of Revenue estimated the value of all property at $467.5 billion. So, the property tax levy this year will equal 2.2% of statewide property values.”

Actually the correct wording would be: “…the value of all [taxable] property at $467.5 billion…”

Two more items in this laundry lists of complaints: in Milwaukee (and likely in Wisconsin generally, see Sect. 70 of Wis Statutes) land is undervalued, the building is thereby overvalued and rising revenues require that property owners regularly improve their buildings and allow themselves to be taxed more. So we have created for ourselves reason for “stable” or declining values, and reason for not investing in our most major investment, the house. Other states assess the land appropriately, and thereby encourage investment in the building.

Finally, when the assessor is unable to otherwise make an assessment, our statute allows the assessor to assess a commercial property based on Income. This is a strange twist on a property tax, but it reflects the retrogressive nature of assessments created by overtaxing the building, and devaluing the land.

One other reason it bugs people. They are too stupid to have a little faith in the US Postal System. For some reason people seem to think they have to stand in line to pay this bill. While I for one enjoy watching these morons on TV every year, I imagine it gets a little irritating if you are one of the morons.

I could never understand why people would go down to City Hall to pay their property tax bill, either. Perhaps a very few of those pay in cash? Some are also trying save the cost of a stamp, I suppose.

The reason people hate property taxes is mostly because the bill comes in one chunk and it usually goes up. It’s a bill you write a check out for and there’s no hope of a refund. It also comes at a time of year where people’s cash flow tends to be a little bit tighter.

If you had to pay sales or income tax in that fashion people would dislike those taxes much more. The thing with income tax is most people, even people who should know better, only care about whether or nor they get a refund and not what their liability for the year actually is. If I had a nickel for every time a client said “I just don’t want to pay in on tax day” or thinks I’m a genius because they got a refund I’d be retired

I think much of the dislike of property taxes comes from the sudden annual bill and the lack of prior periodic payments along the way to cover that bill. Compare property taxes to income taxes.

As I remember it from childhood, Wisconsin’s personal income tax wasn’t withheld from paychecks until 1961 or 1962. Back then, when you filed your Wisconsin tax return in April, you were expected to attach a check for the total amount. This was different from federal income tax, which started withholding in the 1940s.

I remember my 5th or 6th grade teacher (I had the same teacher both years) saying how sick that single payment made him feel. I also remember my father saying he had to borrow money to pay his state income tax.

In July of 1961 or 1962, Wisconsin started withholding and gave people a one-time 6-month income-tax holiday (50% of that year’s tax was forgiven to compensate for the mid-year withholding start and the change from payments in arrears to current-month payments).

You cant own anything in America. All that fantasy they taught you in school was a lie. Its twice as much on businesses, so the use of capital is hampered even worse. Its Government first and you are second class go make a living after they take what you own if you can or just starve they dont care, and they dont care if their paper money that is only a medium of exchange is devalued by their uninhibited borrowing thereby increasing your tax through inflation while simultaneously.decreasing your ability to exchange their paper for real value. Yep thats some of the reasons I am pissed.

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